The federal and New South Wales governments have jointly agreed to a 50/50 bailout of the country’s largest aluminium smelter, Tomago Aluminium in New South Wales’ Hunter region.
Tomago is Australia’s largest electricity user, using approximately 10% of New South Wales’ annual electricity supply.
The taxpayer-funded $2.5 billion rescue package comes after mining giant Rio Tinto warned Tomago could be forced to shut down when its energy supply contract ran out in 2028 due to rising power costs. Tomago Aluminium has agreed to invest at least $1.1 billion in the facility as part of the deal.
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A joint statement from the Albanese and Minns Governments said a long-term renewable energy pathway for the smelter was critical to preserving nationally significant industrial capability and strengthened Australia’s ability to supply the growing global market for low-emissions aluminium.
The joint investment will underpin nearly 3GW of new renewable generation and firming capacity, strengthening the state’s electricity system and supporting long-term energy affordability and reliability for New South Wales.
Prime Minister Anthony Albanese said, “In December last year I stood in the rain at Tomago and told the workers ‘we have your back’.
“Today, alongside the NSW Government, we deliver on that promise. This site isn’t just important for Newcastle and the Hunter, it’s a critical asset for the country and our manufacturing future.
“I’m proud of the work we’ve done with the company, with the Minns Labor Government, with local members and with the workers here on site to secure Tomago’s future beyond 2028.”
Climate Council senior advisor Ben McLeod said the plan to power the nation’s single-largest electricity user with wind, solar, and storage was “a light bulb moment for clean industry”.
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“This deal to lock-in the future of the Tomago Smelter shows what renewable power makes possible: secure jobs, a stronger grid, and less climate pollution,” he said.
“As our old and increasingly unreliable coal-fired generators close, reliable renewables are powering manufacturers into a cleaner, stronger future.”
